Small and Medium-Sized Enterprises (SMEs) in Macau can now access a unique climate insurance policy that provides compensation during extreme weather events even if no physical damage occurs.
The Macau government announced the measure today, highlighting a new clause where businesses can claim 10% of their insured capital if a Signal 10 tropical cyclone—the territory’s highest alert level—remains in effect for 10 hours or more.
Hong Jiawen, General Manager at China Taiping Life Insurance, explained that this parametric feature complements existing coverage for physical losses caused by Signal 8 typhoons, storm surges, or torrential rain.
The policy covers structural foundations, merchandise, and electronic equipment. For instance, a company paying an annual premium of 15,000 patacas (approximately 1,589 euros) would be eligible for total coverage up to 100,000 patacas.
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To encourage adoption, the government is increasing its subsidy for eligible SMEs, covering up to 70% of the standard annual premium for those with no prior claims.
The expansion of this insurance scheme follows a record-breaking year for extreme weather. In 2025, Macau was hit by 14 typhoons, the highest number since records began in 1968. Notably, typhoons Wipha and Ragasa marked the first time in history that Signal 10 was hoisted twice in a single year.
While the 10-hour duration threshold is high, it was met during Typhoon Ragasa, proving the potential utility of the new clause. For 2026, meteorological services predict that between five and eight tropical cyclones will affect the region, indicating a season slightly more active than the historical average.
